Holden avoids redundancies with two-crew plan for reduced production

GM HOLDEN will cut one of its two manufacturing shifts while attempting to preserve its production workforce when it moves to a single-shift, two-crew operation at its vehicle production plant at Elizabeth, South Australia, next month.

Holden’s 3150 production workers will be offered a choice of one-week-on, one-week-off or fortnight-on, fortnight-off shifts in an effort to avoid retrenchments as Holden cuts production to 310 vehicles a day – about half of its normal two-shift capacity of 620.

Workers will get 50 per cent pay for days when they are not working.

Holden has already slashed production in recent months, scheduling ‘down days’ at both Elizabeth and its Port Melbourne engine plant on several occasions while bringing forward holidays and rostered days off to minimise the impact on workers.

The restructuring comes as Holden battles a 20 per cent fall in domestic year-on-year sales, as well as a tough export climate forced by the global economic meltdown.

The move to a single shift starting May 4 is designed to protect the company’s manufacturing skills base until conditions improve.

It also has an eye on the need to expand production with the introduction at Elizabeth of a second car line – a new small car based on General Motors Delta II platform in the third quarter of next year.

Left: Holden chairman and managing director Mark Reuss.

GM Holden chairman and managing director Mark Reuss said the split-shift arrangement was the best way to protect jobs and keep Holden in the best possible shape for a return to normal conditions.

“We are acutely aware of the impact this will have on our people, and we will do everything we can to support them through this,” he said.

“This will include 50 per cent pay on down days and ensuring flexibility in our rostering to assist employees to plan their lives.”

Workers on the afternoon shift at Elizabeth were told of the plan at a series of meetings last night.

Holden executives, including Mr Reuss, have already taken pay cuts, while pay has been frozen for white-collar workers and bonuses have been cancelled.

While production cuts at Holden and other manufacturers have hurt the automotive component supplier industry, Mr Reuss said the new Holden production schedule would at least help bring some certainty and clarity so the suppliers could align their efforts.

“These changes preserve the integrity of the entire process of making cars from suppliers to dealers,” he said.

Unions have generally welcomed the moves, but they have called for stronger moves to shore up the ailing car industry.

Australian Manufacturing Workers' Union (AMWU) national secretary Dave Oliver said: “Our main concern is that we take steps to minimise job losses in this vital Australian industry.

“Currently, we are seeing unprecedented conditions of reduced demand and we must adjust to those conditions.

“The AMWU is working with employers and the government to consider initiatives to maintain capacity, retain staff and help the industry through the current economic climate.” Mr Oliver agrees that Holden’s decision should provide some security for the auto components sector.

“Australia’s automotive industry has a strong base, and we are confident, if handled correctly, we will come out of this period with capacity to grow further in the future,” he said.

So far this year, Holden has sold 26,979 cars – almost 7000 fewer than in the first three months of 2008, representing a fall of 20.3 per cent.

The locally-made Holden Commodore sedan has not been as badly affected, down 13.3 per cent, although derivatives such as the Holden Ute (down 41 per cent), Statesman (down 70 per cent) and Caprice (down 39 per cent) have been pummelled.

Holden’s market share has slipped slightly, to 12.7 per cent year to date, although the slide accelerated in March when its share was 12.1 per cent.

The Holden moves come as parent company GM is battling for survival in the US. The Obama administration has given the world’s number two motor company 60 days to come up with a revised survival plan with deeper concessions in order to qualify for further US government aid.

New GM chief executive Fritz Henderson has warned GM bond holders and unions that GM will consider chapter 11 bankruptcy if concessions are not forthcoming.